Financial Forecasting: Tools and Applications (10 hrs)

Course Description

Financial Forecasting: Tools and Applications

Business and financial forecasting is of extreme importance to managers at practically all levels. It is required for top managers to make long-term strategic decisions. Middle management uses sales forecasts to develop their departmental budgets. Every other plan such as a production plan, purchasing plan, manpower plan, and financial plan follows from demand forecasting. The critical element in any supply chain plan is the demand forecast.

The goal of this course is to provide a working knowledge of the fundamentals of business forecasting that can be applied in the real world regardless of firm size. We walk you through basic forecasting methodology, and then practical applications. It encompasses a wide range of topics of major importance to practical managers in all functional areas, including cash flow forecasting, cost prediction, earnings forecasts, bankruptcy prediction, foreign exchange forecasting, interest rate forecasting, and technological forecasting. Emphasis is placed on the use of computer technology such as spreadsheets and stand-alone forecasting software.

Course information

Price: $107
Course No. 7011
Format: Online pdf (281 pages).
Prerequisites: Basic Accounting
Advance Preparation:  None
Level: Overview
CPE Credit: 10 Hrs.
Field of Study: Finance
Course expiration:  You have one year from date of purchase to complete the course.
Course Revision Date: March 2016

Objectives

After completing this course, participants should be able to:

Chapter 1 Forecasting and Managerial Planning
1. Recognize how a forecast relates to managerial planning
2. Recognize the components of a forecasts and what it predicts
3. Identify various forecasting methods and how to select the right method.

Chapter 2 Forecasting, Budgeting, and Business Valuation
1. Identify the important steps to budgeting
2. Recognize the value of sensitivity analysis.
3. Identify factors in the computation of business valuation.

Chapter 3 Moving Averages and Smoothing Methods
1. Recognize the special features of naive forecasting models.
2. Recognize the difference between regression analysis and exponential smoothing.

Chapter 4 Regression Analysis
1. Recognize regression analysis and how to calculate the least-squares method.

Chapter 5 Multiple Regression
1. Recognize the value and use of multiple regression.
2. Identify situations for nonlinear relations.
3. Recognize when to use dummy variables in a regression model.
4. Identify the situation when independent variables can cause multicollinearity.

Chapter 6 Time Series Analysis and Classical Decomposition
1. Identify the four basic components of the time series data.
2. Recognize the steps to perform decomposition of time series.
3. Recognize the value of trend analysis

Chapter 7 Forecasting With No Data
1. Recognize components of quantitative forecasting models for new products.
2. Identify how to choose the right growth model.

Chapter 8 Indirect Methods
1. Identify assumptions use to forecast sales with the Markov model.
2. Recognize the purpose of input-output analysis.
3. Understand the value of performing market surveys for forecasting.
4. Identify different of types of indirect methods of forecasting.
5. Recognize some of the Leading Economic Indicators.

Chapter 9 Evaluation of Forecasts
1. Recognize methods of comparing a predicted forecast change with the observed change.
2. Identify responses required when a forecasts is now performing well.
3. Identify how to measure and rank accuracy of forecasts.

Chapter 10 Sales and Revenue Forecasting
1. Recognize different methods of performing economic forecasts.
2. Identify the value of a combination method of sale forecasting.

Chapter 11 Forecasting the Economy
1. Recognize the use of different econometric models.
2. Identify some sources of economic data that can be used to improve forecasts

Chapter 12 Financial and Earnings Forecasting
1. Identify the steps in projecting financial needs for the firm.
2. Recognize the Certified Public Accountant’s involvement and responsibility with prospective financial statements.
3. Recognize the implication of earnings forecasts and the Sarbanes-Oxley Act requirements.
4. Identify different sources provided from security analysts for earnings projections.

Chapter 13 Cash Flow Forecasting
1. Identify several methods of forecasting the cash collection pattern.
2. Estimate future cash collections from accounts receivable.

Chapter 14 Analysis of Cost Behavior and Cost Prediction
1. Recognize the value of developing a strong understanding of a firm’s cost behavior.
2. Identify examples of the different cost found in a company, such as fixed and semi-variable costs.
3. Recognize different methods for estimating costs.

Chapter 15 Bankruptcy Prediction
1. Identify how different analyses can be useful as bankruptcy prediction models and the limitations of some methodologies.
2. Recognize popular prediction models for predicting bankruptcy.

Chapter 16 Forecasting Foreign Exchange Rates
1. Recognize the reasons for managers to forecast the foreign exchange rates.
2. Perform calculations based on the relationship between exchange rates and interest rates.
3. Recognize the different types of forecasting techniques used to predict the foreign exchange rates.

Chapter 17 Interest Rate Forecasting
1. Identify the factors that influence interest rates
2. Recognize popular forecasting methodology for interest rates

Chapter 18 Technological Forecasting
1. Recognize how technological changes affect businesses.
2. Identify characteristics and accuracy of technological forecasting.
3. Identify the trends that affect the future of forecasting.


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